Software firms go to Washington to defend patents

Software patents, facing new scrutiny in the U.S., drive innovation and protect huge investments by developers, representatives of software companies said during a Capitol Hill briefing.

The U.S. patent system isn't perfect, but lawmakers and judges shouldn't solve current controversies by eliminating software patents altogether, executives with Microsoft, Oracle, IBM, Covia Labs and Procter & Gamble said during a briefing Thursday before congressional staffers in Washington, D.C.

"As my grandmother used to say, you don't throw the baby out with the bath water," said Dorian Daley, senior vice president and general counsel at Oracle.

Instead, lawmakers should look at ways to improve patent quality, make it tougher for patent licensing firms to file infringement lawsuits and require companies to be transparent about the patents they hold, Daley said during the briefing, sponsored by software trade group BSA and the National Association of Manufacturers.

But companies can be transparent about the patents they hold without congressional action, said Brad Smith, Microsoft's general counsel and executive vice president. Microsoft will publish information on all the patents it holds by April 1, Smith announced.

Congress passed the America Invents Act, a patent reform bill, in late 2011, but it can do more, panelists said. Smith called on Congress to look into requiring the loser of a patent infringement lawsuit to pay the winner's legal expenses. That change would give pause to so-called patent trolls -- patent licensing companies that produce no products -- before they file lawsuits, he said.

Microsoft and Oracle were among the companies supporting patent reform efforts during the last seven years that some critics say would have weakened patent protections and made it harder for patent holders to collect huge damage awards. But Smith and Daley argued Thursday that software patents need to be protected.

But just this month, the U.S. Court of Appeals for the Federal Circuit heard a case that could have a broad impact on software patents. In the case, CLS Bank v. Alice Corp., the court is considering whether companies should be able to get patents on abstract ideas when they combine those ideas with a computer process.

Developing complex enterprise-level software takes time and money, and patents help protect that investment, Daley said. "In today's environments, where hundreds of thousands of apps are just a click away on all of our mobile devices, it's pretty easy to see how some assume that software development is easy," she said. "I'm here to tell you it's not. It requires highly skilled engineers and incredible investments."

Oracle spent US$4.5 billion on research and development in 2012, she said, and a weakening of software patents would hurt the company, its investors and customers.

Software patents aren't just important to IT companies but also to Procter & Gamble, the large maker of household goods, said Thomas Lange, director of modeling and simulation in the R&D division of the company. Lange's division uses computer modeling to help Procter & Gamble design toilet paper that tears correctly, diapers that leak less and laundry soap containers that don't break when dropped, he said.

The company uses software to design products and to manufacture them in automated factories, he said.

"Innovation is our lifeblood," Lange said.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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